Rich Greenfield Doubles Down On AMC Entertainment Bear Case: 'There's No Short Squeeze, This Is Just Factually Bonkers'

One of the most outspoken voices against AMC Entertainment Holdings AMC shared more commentary Thursday on the company's share sales and stock price movement. 

What Happened: In the last five trading days, over 3.2 billion shares of AMC have traded, which is significantly higher than the company’s float of around 500 million shares, Rich Greenfield of Lightshed Partners told CNBC’s “Fast Money” team.

“There’s no short squeeze,” Greenfield said.

A short squeeze occurs when positions become trapped and can’t get out. The move in AMC is not a result of “diamond hands,” according to Greenfield.

“There’s not a liquidity issue here, this thing trades like water.”

Greenfield, who has a price target of 1 cent on shares of AMC, told CNBC that what is happening is retail traders buying shares from other retail traders.

“A lot of people will be left holding the bag.”

Greenfield said investors are not buying AMC shares because of fundamentals, but rather following the herd and buying because someone else told them to buy the stock. 

See Also: How To Buy AMC Stock

Greenfield On The Movie Theater Sector: The fundamentals of AMC don’t support the share price valuation, Greenfield told CNBC. 

Cinemark Holdings CNK, a peer and competitor to AMC, has similar financials to AMC and has around the same EBITDA. Greenfield questioned how Cinemark can trade at an enterprise value of $5 billion and AMC trades at $30 billion.

“This is just factually bonkers, literally,” Greenfield said.

The shift by movie companies to streaming services and avoiding theaters is a fundamental shift that's being lost on retail traders, Greenfield said.

Movies that do hit theaters are staying for less time before hitting other avenues for consumers to view them, he said. 

Realted Link: AMC, Cinemark, Marcus, Imax: How Do The Cash Balances Of Top Movie Theater Chains Compare 

Greenfield Says More AMC Share Sales Coming: Greenfield said that Cinemark has a stronger balance sheet and AMC will need to continue to sell shares in the future.

“This company needs to raise a lot more capital.”

Greenfield estimates AMC may need to sell 150 million shares to survive and will need shareholders to vote in favor of massive dilution.

He questioned whether AMC CEO Adam Aron will be able to convince shareholders to support more share sales.

AMC is behind on rent payments and has higher capital expenses, according to Greenfield, who said AMC didn’t make money in 2019.

“[It's a] really tough place to be when [you're] sitting on billions of dollars of debt.”

AMC Price Action: Shares of AMC were trading down slightly at $51.28 at last check Friday.